Matthew Gantner, CEO and Founder—Altum Strategy Group.
The global digital economy continues to grow rapidly. By 2027, global digital transformation spending is set to reach $3.9 trillion U.S. Salesforce describes it as “the process of using digital technologies to create new–or modify existing–business processes, culture, and customer experiences to meet changing business and market requirements.”
I often hear clients say they’re dissatisfied with traditional transformation approaches. For some, they’ve built the wrong strategic ecosystem (e.g., creating an expensive luxury solution when a simpler one was needed) or inadequately considered legacy systems and processes. For others it can be a lack of capability and capacity building for people or a failure to unlock the value of data for the organization.
Additionally, I’ve had many conversations with clients regarding their approach to transformation and the resounding cry is the concern about the risk of “falling down the rabbit hole” of endless projects that fail to deliver measurable value. I believe that responsible transformation has emerged as a solution, emphasizing incremental modernization and change over large-scale, long-term projects.
Responsible Transformation As A Path Forward
Responsible transformation focuses on sustainable, smaller-scale projects that form part of a larger transformation roadmap, to reduce the fear of overwhelming, never-ending change. I’m noticing businesses increasingly seeking bite-sized projects that yield early wins while mitigating risks. This approach reflects a practical, responsible method for addressing transformation that balances urgency with capability.
So, what do companies need to dig into before embarking on responsible transformation?
• Understanding Customer Data: Gaining a deep understanding of customer data and business needs can get a transformation project started with confidence.
• The Cost of Inaction: One of the critical questions leaders need to ask is, “What is the cost of not transforming?” Addressing the opportunity cost and potential risks of inaction helps underscore the urgency of change.
Data And AI: Unlocking Value Responsibly
With the increasing focus on AI, I’m seeing many companies recognize that AI offers more than just innovation; it can provide opportunities for faster training, better customization and improved business connectivity. However, there are key takeaways businesses need to understand when it comes to implementation:
• Use case examples matter. AI’s potential is immense, but demonstrating real-world applications helps build trust and momentum. AI can significantly improve operations by providing faster data access, connectivity and recommendations.
• Data security and accountability are imperative. Securing company data is non-negotiable, with boards and executives paying close attention to this area. Businesses must ensure robust governance frameworks to manage sensitive information.
• Start small, growing fast. Companies should focus on achieving “small wins” by tackling the first phase of projects before embarking on full-scale transformation. This approach can reduce risks and showcase early gains, fostering trust and commitment across teams.
Three Lessons For Businesses Embarking On Digital Transformation
1. Focus on strategic alignment.
Ensure that your people, processes and technology are aligned with your overall business strategy. For example, establishing a change management framework is critical to implementing a structured approach to digital transformation, addressing how people, processes and technologies will transition. This framework should include establishing clear communication channels, managing stakeholder expectations and providing support throughout the transformation process. Additionally, we know that effective digital transformation often requires new skills. Business leaders must invest in training and development, ensuring employees are upskilled to work effectively with the latest technologies. This builds confidence and can reduce resistance to change while creating new career paths for employees whose current roles may be impacted by integrating new technologies.
2. Demonstrate the immediate impact.
Responsible transformation can offer scalable quick wins, giving businesses the confidence to expand into more significant initiatives. In manufacturing, for example, this can look like implementing a predictive analytics tool that uses existing sales and market data to provide more accurate demand forecasting, leading to immediate improvements in inventory management, reduced stockouts and better alignment of production schedules with customer demand. Once this technology is up and running, it can be expanded to other functions such as supply chain optimization, customer behavior analysis or even product development.
3. Understand the human element.
Leaders should identify and nurture “data champions” within various departments. These champions serve as advocates and experts on digital tools and data insights. They can help drive adoption within their teams, answer questions and provide support as their colleagues adjust to the new technologies and data insights. In addition, forming cross-functional teams allows for sharing knowledge and best practices across departments. For example, a company could create a cross-functional team of IT specialists, operations managers and marketing professionals collaborating on implementing new customer analytics tools. These teams help bridge the gap between technical and non-technical functions, ensuring everyone is empowered to use the tool(s) effectively and maximizing its impact on the business.
When approached responsibly, digital transformation can offer tremendous potential for growth. By leveraging data, AI and small, incremental changes, companies can avoid pitfalls and achieve lasting, sustainable success.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Read the full article here
